Emerging markets expert Mark Mobius has said he is buying into the selloff driven by the coronavirus, as the market may have already hit the bottom.
The veteran investor has embarked on a buying spree and sees value in select pharma and luxury stocks roiled by the onset of the coronavirus outbreak.
“Indices around the world have not been much different from what we’ve seen in history. If you look at bear markets since 1987, you find the average decline is about 50 percent, and the average length of time from the peak to the bottom is a little less than three years," Mobius said in an interview to Financial News.
“We may have already hit the bottom. The difference this time is the massive bailout programmes that are feeding money into the market. Whenever you see a massive flow of cash coming into the market, equities will adjust.” he added.
The founder of Mobius Capital Partners LLP is bolstering his personal portfolio with healthcare and pharmaceutical companies, as well as those focused on luxury brands such as LVMH.
“All of these are down, but they are not going to stay down. I’m doing it gradually,” he said.
The coronavirus, which emerged in the Chinese city of Wuhan in late 2019, has now spread to 202 countries and territories, killing more than 38,000 people and leaving hundreds of thousands in quarantine.
The highly infectious virus is spreading rapidly in Europe and the United States, forcing shut down of offices, schools, cafes, cinema halls, malls, upending normal life.
India has also seen infections inch up. It has, so far, reported 32 deaths and 1,251 cases.
The pandemic has roiled equity markets across the globe. All major indices have tanked more than 20 percent from their January levels. Both the Nifty and the Sensex have fallen almost 30 percent from their all-time intraday highs touched on January 16, 2020.